Where To Buy Abroad in 2008

Photo courtesy of *ade

It’s a pretty safe bet that, if you have a pulse, you’ll be familiar with the terms ‘credit crunch’ or ‘sub prime crisis’, even if you are not entirely certain that you know what they mean, let alone imply for the global housing economy. In a year that saw the unthinkable happen – Ireland, Spain and the US face property market doom – we nonetheless begin 2008 on a definite up: a new and growing breed of savvy investors are increasingly discerning about how and where they want to invest their hard-earned cash. Information is power, after all. Let’s take a look at where’s hot and where’s not, for 2008.

Although the Baltic property markets haven’t realized their potential as dramatically as many had thought, the resale market is now strong. Infrastructural investment has failed to be developed as much as many deemed necessary but EU membership has nevertheless brought about a measure of confidence and stability that had been absent from the Bulgarian market before 2007. The ski resort of Pamporovo, which benefits from proximity to Greece thanks to a new highway, is a good bet. Another new EU member, Romania’s blossoming property market has enjoyed good gains in 2007, although gains have been variable, ranging from 7 - 65%, highlighting the need for a good agent with a proven track record. Bucharest, the capital, saw city-centre prices rising by 27% to an average £1,300 per square metre in the first six months of this year, buoyed up by strong local demand and new interest from foreign speculators.

Eastern Europe in general has had a good year, especially Poland, where average sales prices went up 58% in Krakow and 33% in Warsaw. Fast-growing economies, increasingly wealthy populations and more accessible finance have been helped by big infrastructure improvements. Many Poles working abroad send money home now specifically for domestic property investment.

2007 was a year when people were increasingly happy to look further afield for property, and the big winner and top tip for 2008 has got to be Brazil. Natal - the nearest point to northern Europe - is attracting investors to its largely undeveloped coastline. Even though prices there have already risen by up to 50%, bargains aplenty are still to be had and you can still buy beachfront properties for from £800 per square metre. With Latin America’s biggest airport opening in Natal in 2009, the region expects to see good continued growth.

Spain will probably try and pretend 2007 never happened, thanks to it hitting the headlines for all the wrong reasons: money-laundering mayors, land-grabbing developers and coastal over-pricing have dented consumer confidence, not helped by rumours of large scale coastal demolition of ‘illegal’ properties, most of which are owned by unsuspecting expats. In some areas of the Costa Blanca, it is thought that up to 70% of estate agents have closed down. Having said that, an appreciation of quality will probably hit the Spanish market for the first time, as higher-quality destinations such as the Balearics, Costa Brava and Sotogrande, are likely to remain safe, long-term bets.